Despite the faults you made in the past towards payments, there are lenders who can provide you a new loan if you are ready to learn from the mistakes. Unsecured bad credit loans are carved out specifically for the purpose of providing funds to all those people who have in their names late payments, arrears, defaults, CCJs etc. so even if their credit score is very low, they can borrow money.
You can put these loans for any purpose such as renovation of home, planning a wedding party, paying for your child's tuition fee, going to a distance locale, debt consolidation and so on.
Unsecured bad credit loans lenders do not take collateral, which ensures risk free borrowings. Tenants and homeowners both can opt for these loans. Lenders approve a loan amount after carefully assessing the borrowers' repaying ability. Though bad credit people can borrow up to £25000 but usually smaller loan is approved keeping the risks involved for the lenders.
For cutting the risks, lenders charge interest at higher rate. The rate may go further higher as the credit score of the borrowers fall. So, it would be advisable to apply for the loan with improved credit rating after clearing some of the debts.
These are short term loans. Generally the repayment duration ranges from 5 to 15 years. But the lender would like you to repay a smaller amount early in order to cut the risks. But one advantage is that shortly your credit rating improves if you have timely repaid the loan. In fact some people use these loans for repairing their credit rating.
Before applying for the loans, ensure taking your credit report from reputed credit rating agencies and check that all your payments in the past are mentioned in it. You must also know your credit score that will help in finding a suitable deal.
Online lenders provide unsecured bad credit loans at competitive rate of interest. But take their rate quotes first and compare them. Apply to the lender who suits you the most.
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